How Target Corporation Has Evolved Its Customer Loyalty Journey

WM Circle Logo

By: Wise Marketer Staff |

Posted on June 1, 2021

Staying On Target

The evolution of big-box retailer, Target, is impressive to say the least. Starting out as a discount store and now the go-to destination for fashion finds to grocery deals, necessities to impulse buys, Target satisfies shoppers with a mix of adrenaline rush and serotonin surge. Not only has Target hit the mark with low prices on clothing, food, home goods, electronics, and more, they’ve stayed ahead with modern conveniences and technology while rewarding loyal customers with special offers, and while keeping shoppers and employees engaged with community service.

By: Janis MVK

Target debuted in 1962 offering a new kind of mass-market discount store catering to value-oriented shoppers with the need for a higher-quality experience. Part of the then-known-as The Dayton Company, industry experts feared Target would stray from the company’s position as one of the nation’s leading department stores. But as The Dayton Company went from dry-goods, to department stores, to joining forces with the J.L. Hudson Company — acquiring Mervyn’s and Marshall Field’s — Target superseded its counterparts in the Dayton-Hudson portfolio.

By the 1990s, Target expanded its presence with Target Greatland with a new look and more amenities and by the mid-90s, Target debuted SuperTarget reinventing shopping convenience with a one-stop shop combining discount department store goods and groceries. Target beat the odds and was renamed to Target Corporation in 2000.

Keeping up with demands of the evolving retail market, with ever changing technology and customer loyalty, can be tricky. Somehow, Target has remained, well, on target. Here we take a look at how Target has kept its aim and has employed an evolving customer-centric strategy to keep up and stay ahead of the loyalty game.

Reinventing Shopping

As the need for convenience increased, Target decided to keep consumers engaged by evolving its customer loyalty and rewards strategy. Imagine a discount store that offered more discounts. That’s exactly what Target did in 2013 with Cartwheel, a digital coupon app partnered with Facebook saving customers on hundreds of items. Cartwheel (now Target Circle) was a heavily downloaded app, attracting 13-million users who saved more than $160 million on purchases combined by the end of 2014.

That same year, Target kept up with Amazon by offering a subscription-service program starting off with baby-related products that later grew into nearly 4,000 on a variety of items. Then the Store Pickup program allowed customers to order online and pick up at a nearby store in as little as a few hours. This grew into Ship-From-Store where customers could order online for same-day or next-day delivery. By 2018, Target committed to being the easiest place to shop as they expanded fulfillment services offering Shipt, Drive Up, and Target Restock.

Loyalty, Rewards & Security (Oh my!)

As Target continued to revolutionize the shopping game, their credit card journey advanced also, encouraging customers to keep Target top of mind for shopping needs and making the Target credit card top wallet. The first private label credit card known as the Target Guest Card, later evolved to the Target Visa Credit Card — the company’s first credit card to be accepted at major retailers nationwide. Later, the card product was renamed to REDcard. The portfolio of credit products expanded, adding the Target Check Card offering prime payment convenience and benefits to shoppers like a five percent discount on purchases.

Progress was not without missteps, and with technology advancing faster than a blink of an eye, Target was hit with a data breach in 2013. Criminals were able to obtain cardholder’s credit and debit information. To strengthen security, Target invested $100 million to accelerate the transition of its REDcard portfolio to chip-and-PIN-enabled technology. Shortly after, the entire REDcard portfolio was enabled with MasterCard’s chip-and-PIN solution while all stores were equipped with the supporting software, next-generation payment devices, and terminals. To continue advancing security measures, the Cyber Fusion Center was designed to bring information security to new levels of protection.

In order to boost REDcard memberships, Target experimented with Target Red, a pilot loyalty program with exclusive benefits to save on future shopping trips and vote for local organizations to receive Target community giving donations. In 2019, Target Circle was born, a new customer loyalty initiative offering customers birthday rewards, access to special sales, one percent back on in-store purchases redeemable for future visits, and giving cardholders the choice to donate to Target-supported, local, non-profit organizations. To make acquisition simple and convenient, customers were automatically enrolled for those who had Cartwheel, a account, or the Target REDcard. 

Giving Back

Giving back has always been part of the company’s DNA. Since the early 1900s, The Dayton Foundation aided in promoting the welfare of mankind anywhere in the world. By the 1940s, they implemented the practice of giving five percent of pretax profits back to the community. And through volunteer programs like Target’s Holiday Helpers and corporate-wide volunteer initiatives like handing out trees to customers on Earth Day, the company quickly established itself as a force in the retail space to give back.

In the 1990s, Target joined forces with the National Park Service and the National Park Foundation's effort to restore the Washington Monument. Target also funded the construction of Target House, a home-away-from-home for families with children at St. Jude Children’s hospital undergoing treatment.

Another community program receiving a lot of attention was the Take Charge of Education program. This program allowed REDcard cardholders to designate a donation to a school of their choice and have Target donate an amount equal to one percent of their REDcard purchases. But Target didn’t stop there. The Target School Library Makeover Program was another initiative that made a difference. In 2012, Target’s giving reached $4 million a week to local communities. Today, Target is known for its impactful community service worldwide.

Read Also: Walgreens Enables Hyper-local Charitable Giving Through myWalgreens

Gaining loyalty and earning rewards comes easy for Target customers, REDcard cardholder or not. Here’s how Target's customer loyalty offer has evolved over time:

  • Target’s Cartwheel is now integrated with the Circle Program through the REDcard where customers can earn one percent in rewards with a non-REDcard payment.
  • To acquire customers for Target’s REDcard, customers get a five percent discount off most purchases automatically.
  • To make earning and spending rewards convenient, customers can use those perks in-store or online.
  • As for Target Corporation giving back, the initiatives have grown with social and economic changes. Target is now known for their philanthropy from disaster and hunger reliefs, military and veteran support, environmental causes, local and global initiatives, and with St. Jude Children’s Research Hospital.

The Target Corporation has been able to gain the trust and loyalty of its customers by consistently offering customers affordable goods without hefty department store prices and while offering convenience with ever evolving technology.

All the while, Target has continued to hit the mark, engaging and giving back to the community, and gaining the trust and loyalty of customers for years to come.

Janis MVK is a content writer and manager, journalist, marketing and communications professional and mom of two beautiful girls, based in the suburbs of Chicago.